Analysts at JPMorgan Chase & Co. (NYSE: NYSE:JPM) estimate that Bitcoin’s (CRYPTO: BTC) cost of production is down to $13,000 from $24,000 in June.
What Happened: JPMorgan strategists led by Nikolaos Panigirtzoglou, in a note to clients seen by Bloomberg on Wednesday, said that the drop in production costs for the digital asset was “almost entirely” due to a decline in electricity use.
This change in Bitcoin’s production cost is evidence of some miners' attempts to protect profitability by deploying more efficient mining rigs.
Analysts explained that while the reduction in production costs could “potentially reduce” pressure on miners to sell their Bitcoin holdings, it might also be a hindrance to Bitcoin’s price going forward.
“The decline in the production cost might be perceived as negative for the Bitcoin price outlook going forward,” the note stated. “The production cost is perceived by some market participants as the lower bound of the Bitcoin’s price range in a bear market.”
With JPMorgan’s current estimate of Bitcoin’s production cost, this would imply that the leading digital asset could fall to a low of $13,000 in the current bear market.
See Also: JPMorgan Analysts List 2 Reasons Why Crypto Deleveraging Will End Soon
Price Action: According to data from Benzinga Pro, at press time, BTC was trading at $19,754, down just 0.10% over the last 24 hours.
Ethereum (CRYPTO: ETH) was trading at $1,085, up 1.18% and Dogecoin (CRYPTO: DOGE) was trading at $0.06, down 2.35% over the same period.
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